Product Decisions

12 Key excerpts on "Product Decisions"

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  eBook - ePub

  Product and Services Management

  • George Avlonitis, Paulina Papastathopoulou(Authors)
  • 2006(Publication Date)
  • SAGE Publications Ltd

    (Publisher)

  2

  Types of Product Decisions

   

  Introduction

  We define product decision as every conscious decision made by a company for a product. There are many different such decisions. At one extreme there are such things as a minor modification of the label or colour of the package. At the other extreme, there are such things as diversification into new business fields, either through internal R&D or mergers and acquisitions.

  In Figure 2.1 , there is a three-fold classification of Product Decisions:

   

  • What are the decisions that a company should make about the product types?
  • What are the decisions that a company should make about the tangible/physical product?
  • What are the decisions that a company should make about the intangible/augmented product?

  The chapter is concluded with a special section about the Product Decisions made by service providers.

  Decisions about the product types

  The decisions about the product types to be offered represent the most critical decisions in determining the future of a company. The management must first decide what products to offer in the market place before other intelligent Product Decisions pertaining to the product’s physical attributes, packaging branding, and so on, can be made.

  There are two distinct levels at which such changes take place, namely:  

  • the product-mix level and
  • the product-line level.

  The Committee on Definitions of the American Marketing Association has defined product mix as ‘the composite of products offered for sale by a firm or business unit’. The same committee has defined product line as ‘a group of products that are closely related either because they satisfy a class of need, are used together, are sold to the same customer groups, are marketed through the same type of outlet or fall within a given price range’ (Alexander, 1980).

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  MKTG

  • Charles Lamb, Joe Hair, Carl McDaniel, , Charles Lamb, Charles Lamb, Joe Hair, Carl McDaniel(Authors)
  • 2020(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  © Photo Credit Here 178 PART THREE: Product Decisions Andrey_Popov/Shutterstock.com LEARNING OUTCOMES After studying this chapter, you will be able to… 10-1 Define the term product 10-2 Classify consumer products 10-3 Define the terms product item, product line, and product mix 10-4 Describe marketing uses of branding 10-5 Describe marketing uses of packaging and labeling 10-6 Discuss global issues in branding and packaging 10-7 Describe how and why product warranties are important marketing tools Product Concepts 10 Copyright 2021 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 10-1 WHAT IS A PRODUCT? The product offering, the heart of an organization’s marketing program, is usually the starting point in creating a marketing mix. A marketing manager cannot determine a price, design a promotion strategy, or create a distribution channel until the firm has a product to sell. Moreover, an excellent distribution channel, a persuasive promotion campaign, and a fair price have no value when the product offering is poor or inadequate. A product may be defined as everything, both favorable and unfavorable, that a person receives in an exchange. A product may be a tangible good like a pair of shoes, a service like a haircut, an idea like “don’t litter,” or any combination of these three. Packaging, style, color, op- tions, and size are some typical product features. Just as important are intangibles such as service, the seller’s im- age, the manufacturer’s reputation, and the way consum- ers believe others will view the product. To most people, the term product means a tangible good.

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  Managing Marketing Information (RLE Marketing)

  • Nigel Piercy, Martin Evans(Authors)
  • 2014(Publication Date)
  • Routledge

    (Publisher)

  Table 1.1 . This approach distinguishes between the stages of the management process and the type of activities and information need at each stage. This model may then be applied to marketing variables.

  There are many models of marketing variables, and one attempt at summary is shown in Table 1.2 . The point of this model is to introduce a distinction between strategy and operations, which suggests different information needs, both in information type and the level of decision making. Broadly, this difference lies in the need to monitor the broad environments of the firm for strategic choices to be made, compared to collecting information about the firm’s customers, distributors, competition and marketing results for shorter-term management decision making.

  Table 1.2: Marketing Decisions

  MARKETING STRATEGY DECISIONS
  Defining ‘what business’ the firm is in — the mission.
  Choosing product markets.
  Choosing methods of growth.
  Design a configuration of marketing variables for each mission
  MARKETING OPERATIONS DECISIONS
  Product policy –	launches, modifications, withdrawals, packaging, branding.
  Price policy –	levels, discounts, production, export levels.
  Communication –	sales force: budget, activities, goals; advertising: budget, media, messages, goals; promotion: budget, methods, goals.
  Distribution –	channel: recruit, motivate, control distributors; logistics: stock levels, transport and storage as customer service.

  This comes fairly directly to the question of what information is relevant to these marketing management decision areas, which vary from broad strategic issues — such as the impact on food manufacturers of the present developments in biotechnology which promise to change methods of production and storage as well as what can be produced and stored — down to intimate operating issues, like the productivity of sales calls made by a particular salesman or the effect of changing the design of a product or package. We turn, therefore, to the need to distinguish different types of marketing information.

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  Strategic Marketing Management in Asia

  Case Studies and Lessons across Industries

  • Syed Saad Andaleeb, Khalid Hasan(Authors)
  • 2016(Publication Date)
  • Emerald Group Publishing Limited

    (Publisher)

  7 ▾ Product Decisions Murali Manohar Bhupathi This chapter examines product as a concept and addresses some core issues around products for managers to comprehend. Understanding the levels of products is a strong starting point, followed by a brief introduction to the Product Life Cycle con-cept, new Product Decisions, and the idea of a product mix. Subsequent chapters address new products in detail, explore branding and highlight issues in packaging. A special chapter is also devoted to services as a manifestation of intangible products. Organizations offering products to the market can focus on a physical product or a service depending upon the line of business. In simple terms “ a product is anything that the company offers to the market for a price, ” but there are many additional factors to be considered in order to maximize its chances of success in the ever-competitive markets. Let us look at some of the definitions offered by leading scholars or agencies. The American Marketing Association (AMA) defines a product as “ the bundle of attributes (features, functions, benefits, and uses) capable of exchange or use; usually a mix of tangible and intangi-ble forms. ” a Thus, a product may be an idea, a physical entity (a good) or a service, or any combination of the three. It exists for a. https://www.ama.org/resources/Pages/Dictionary.aspx?dLetter=P 209 the purpose of exchange to satisfy individual and organizational objectives. Kotler, Armstrong, Brown, and Adam (2006) define the term product as “ anything that can be offered to a market that might satisfy a want or need. ” 1 For them, a product is more than some-thing physical; it is anything that can be offered to a market for attention, acquisition, or use, or something that can satisfy a need or want. Therefore, a product can be a physical good, a service, a retail store, a person, an organization, a place, or even an idea.

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  Marketing and the Customer Value Chain

  Integrating Marketing and Supply Chain Management

  • Thomas Fotiadis, Dimitris Folinas, Konstantinos Vasileiou, Aggeliki Konstantoglou(Authors)
  • 2022(Publication Date)
  • Routledge

    (Publisher)

  1 Marketing mix elements: (P)roduct: Delimitation and integrative approach with SCM

  DOI: 10.4324/9780429684883-1

  Introduction

  This chapter presents how product-based decisions must be the result of creative synthesis and good cooperation between the marketing and supply chain executives of a business, as well as among work groups made up of staff from the main partners of a supply chain. In practice, the decisions made and their execution in relation to the product essentially have priority and decisively influence decisions in relation to the 3Ps of the marketing mix; without making a particularly detailed definition of the product, there is no need to make important decisions in terms of the pricing, distribution and promotion/communication of the product.

  Learning goals

  After reading this chapter, you will be able to answer the following questions:

  • Why is cooperation important between the strategic partners of the supply chain in the efficient offer of product solutions to the final customers?
  • What is the development process of the new product?
  • What are the stages in the life cycle of a product, and the decisions that must be taken by the business in collaboration with the others involved in the supply chain?

  Structure

  1. 1.1 Product design and operations planning within the supply chain context
  2. 1.2 Definition and classification of products
  3. 1.3 Decisions concerning the product mix, brand, packaging and labeling of a product
  4. 1.4 The new product development process
  5. 1.5 Product life cycle
  6. 1.6 Inventory management
  7. 1.7 Demand forecasting

  1.1 Product design and operations planning within the supply chain context

  The modern world is an extremely competitive environment. If there is a lack of feasible coordination in the optimal improvement of the entire supply chain to make it effective and efficient, the supply chain will not manage to create and maintain or increase its competitive edge in relation to the “product” packet that it will offer to its final customers.

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  Human Judgment and Decision Processes in Applied Settings

  • Martin F. Kaplan, Steven Schwartz, Martin F. Kaplan, Steven Schwartz(Authors)
  • 2013(Publication Date)
  • Academic Press

    (Publisher)

  The results of some empirical investigations conducted with both executives and nonbusiness-related individuals are discussed, and some suggestions are made for the establishment of a training program for executive decision making. MARKETING DECISIONS AND MODELS TEE PHENOMENOLOGY OF MARKETING The marketing manager can be said to be that expert in the firm who manipulates the interface between consumer preferences, or needs, and the firm T s product or service. An effective marketing manager structures the firm T s posture in such a manner that the product or service satisfies consumer needs better than competing products, and at a profit to the firm. The traditional (e.g., McCarthy, 1975) variables available to the marketer to satisfy consumer preferences are the Four Ps (Kotier, 1975): product, price, promotion, and place (physical distribution networks). Some illustrations of the marketing manager 1 s decision options for each of these traditional variables are presented below. Product The marketer encounters two possibilities with regard to product: to contribute to the design or development of a new product, or to deal with an already existing product or service. 230 THOMAS V. BONOMA New product marketing is at once a very liberating task and one fraught with difficulties (cf. Charnes, Cooper, DeVoe, & Learner, 1968; Wilson & Atkin, 1976). It is liberating because it provides the marketer with the most latitude in attempting to satisfy consumer needs at a profit to the firm. It is fraught with difficulties because, though it is becoming increasingly risky not to innovate (Kotier, 1975, p. 197), it is also increasingly difficult to innovate successfully. Kotier (1975), in a basic marketing management text, lists the following tasks for the marketing manager who must decide (sequentially) about new product introduction: 1. good ideas must be generated, and screened from bad ideas; 2.

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  Marketing

  • William Pride, O. C. Ferrell(Authors)
  • 2019(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  Product design refers to how a product is conceived, planned, and produced. Components of product design include styling (the physical appearance of the prod- uct) and product features (the specific design characteristics that allow a product to perform certain tasks). Companies often differentiate their products by providing support ser- vices, usually called customer services. Customer services are human or mechanical efforts or activities that add value to a product. 12-4 Explain how businesses position their products. Product positioning relates to the decisions and activities that create and maintain a certain concept of the firm’s product in customers’ minds. Buyers tend to group, or “position,” prod- ucts in their minds to simplify buying decisions. Marketers try to position a new product so that it appears to have all the characteristics that the target market most desires. Positioning plays a role in market segmentation. Organizations can posi- tion a product to compete head-to-head with another brand or to avoid competition. Positioning a product away from com- petitors by focusing on a specific attribute not emphasized by competitors is one strategy. Other bases for positioning include price, quality level, and benefits provided by the prod- uct. Repositioning by making physical changes in the product, changing its price or distribution, or changing its image can boost a brand’s market share and profitability. 12-5 Discuss how product deletion is used to improve product mixes. Product deletion is the process of eliminating a product that no longer satisfies a sufficient number of customers. Although a firm’s personnel may oppose product deletion, weak prod- ucts are unprofitable, consume too much time and effort, may require shorter production runs, and can create an unfavorable impression of the firm’s other products. A product mix should be systematically reviewed to determine when to delete prod- ucts.

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  The Official CIM Coursebook

  Strategic Marketing Decisions 2008-2009

  • Isobel Doole, Robin Lowe(Authors)
  • 2012(Publication Date)
  • Routledge

    (Publisher)

  Unit 1

  Introduction to strategic marketing decisions

  Learning objectives

  Strategic marketing decisions need to be made throughout the marketing planning process, as well as at critical times in response to the competitive challenges facing the company. At these times strategic marketing decision-making may not necessarily be within the formal planning or budgeting cycle, but part of the iterative process of strategy development. In this module, the development of a sustainable competitive advantage is viewed as a continual process requiring a constant stream of strategic marketing decisions to be made that are individually sound and that collectively contribute to the marketing planning process and add value for shareholders and other stakeholders.

  In this unit you will:

  1.1  Examine the role of life cycles in strategic decisions to manage competitive advantage across global, international and domestic markets.

  1.2  Examine the influence of market position on strategy and performance.

  1.3  Critically appraise the changing dimensions of strategic decisions made to sustain competitive advantage in today’s global markets.

  1.4  Assess how product/market/brand/customer life cycles can be managed strategically across markets.

  1.5  Examine the role of competitive relationships and how organizations compete to achieve customer preference.

  Having completed this unit you will be able to:

  ♦  Appraise a range of corporate and business visions, missions and objectives and the processes by which they are formulated, in the light of the changing bases of competitive advantage across geographically diverse markets.

  ♦  Demonstrate the ability to develop innovative and creative marketing solutions to enhance an organization’s global competitive position in the context of changing product, market, brand and customer life cycles.

  This unit relates to the statements of practice: Bd.1

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  Strategic Marketing Management

  • Richard M.S. Wilson, Colin Gilligan(Authors)
  • 2012(Publication Date)
  • Routledge

    (Publisher)

  Figure 12.1 and highlights the way in which the management of the mix has as its principal purpose the creation of demand for the product or service, and that this is done against the background of the sorts of factors to which reference was made in Chapters 4–6. Given this, it should be apparent that decisions about the product, price and so on are not made in isolation; they need to take account not just of organizational objectives, but also the competitive, social, political, legal, technological and economic environments. It is the failure to do this effectively that ultimately leads to organizational performance declining.

  Figure 12.1 The marketing mix and the marketing environment

  12.3 Product Decisions and strategy

  It is commonly acknowledged that the most important single element of the marketing mix is the product, and it is for this reason that our discussion of the mix begins with this. Product policy is, or should be, the principal preoccupation of marketing managers since it is, as Thomas (1987, p. 238) has pointed out, ‘the product or service offering of a company or organization [that] ultimately determines the nature of the business and the marketplace perception of the business. In this sense it is the core of the marketing management function.’ In making this comment Thomas gives implicit recognition to the idea that, although in an ideal world marketing management starts with the identification and selection of opportunities, in practice resources have generally already been committed. The principal concern of most organizations is therefore productstrategy and management rather than market

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  Organisations and the Business Environment

  • Tom Craig, David Campbell(Authors)
  • 2012(Publication Date)
  • Routledge

    (Publisher)

  Marketing and Business Products

  DOI: 10.4324/9780080454603-28

  Learning Objectives

  After studying this chapter, students should be able to describe:

  • the marketing concept;
  • the role of the marketing function and the nature of the marketing mix;
  • the nature of business products and the stages of the product life cycle;
  • pricing strategies in marketing;
  • market segmentation and distribution channels;
  • the major methods of marketing communication and product promotion.

  28.1 Marketing

  Marketing has been interpreted in many different ways, and we should dispense at once with the notion it is simply about advertising and issuing press statements – it is much more. In the modern environment, marketing can be seen as the process of matching the abilities of the organisation to the existing and future needs of its customers, to achieve the greatest benefits for both parties. The result is an exchange in which the organisation receives income through meeting customers’ needs, and the customers receive benefits that satisfy, or perhaps even exceed, their expectations. The term exchange refers to the act of giving something in return for receiving something, which may be in the form of a tangible or intangible product or service.

  Consider the following two definitions of marketing:

  Marketing is the management process which identifies, anticipates and supplies customer requirements efficiently and profitably.

  The Chartered Institute of Marketing – CIM.1

  Marketing is not only much broader than selling … It encompasses the entire business. It is the whole business seen from the point of view of its final result, that is, from the customers’ point of view.

  Peter Drucker (1999) .2

  These two definitions show us two complementary approaches to marketing. Firstly, the Chartered Institute of Marketing (CIM) see it as a management process, that is, something that management does. A management process involves procedures and systems put in place to implement marketing within the organisation. Secondly, Drucker proposes a wider definition than the CIM in that it encompasses the entire business and we can see marketing as a philosophy of business

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  Accounting for Managers

  Interpreting Accounting Information for Decision Making

  • Paul M. Collier, Sandy M. Kizan, Eckhard Schumann(Authors)
  • 2013(Publication Date)
  • Wiley

    (Publisher)

  Marketing textbooks typically introduce marketing strategy as a combination of the 4 Ps: prod- uct, price, place, and promotion. The marketing strategy for a business will encompass decisions about product/service mix, customer mix, market segmentation, value and cost drivers, pricing, and distribution channels. Each element of marketing strategy implies an understanding of accounting, which can help to answer questions such as • What is the volume of products/services that we need to sell to maintain profitability? • What sales mix will optimize our profitability? • What alternative approaches to pricing can we adopt? • How can we ensure we earn a profit over our costs? • Should we keep or drop product lines that are underperforming? This chapter is concerned with answering these questions and focuses on how accounting infor- mation is used to help a company make decisions related to sales mix, pricing, and product/ service offerings. Cost Behaviour Marketing decisions cannot be made without a knowledge of the costs of the business and the impact that marketing strategy has on operations and business profitability. Profitability for marketing decisions is the difference between revenue—the income earned from the sale of products/services—and cost. Often, understanding the costs associated with producing a product or service can be the largest challenge to overcome in ensuring that a company is profitable. For many business decisions, it is helpful to distinguish between how costs behave; that is, whether they are fixed or variable. Fixed costs are those that do not change with increases in busi- ness activity (such as rent). This is not to say that fixed costs never change (obviously rents do 179 CHAPTER 8 MARKETING DECISIONS increase in accordance with the terms of a lease), but there is no connection between cost and the volume of activity. Exhibit 8.1 is a simple graph representing a fixed cost function.

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  Market-Driven Management

  Strategic and Operational Marketing

  • Jean-Jacques Lambin, Isabelle Schuiling(Authors)
  • 2012(Publication Date)
  • Bloomsbury Academic

    (Publisher)

  New Product Decisions 347 to be explicit in its strategic options and market objective. A clear and precise definition of the product concept is important in many respects: The concept definition describes the ■ positioning sought for the product and therefore defines the means required to achieve the expected positioning. The product concept is a kind of ■ specification manual for R&D , whose job it is to examine the technical feasibility of the concept. The description of the product’s promise serves as a ■ briefing for the advertising agency that is in charge of communicating the new product’s identity and claims to the marketplace. Thus, the product concept defines the reference product market or segment in which the future product should be positioned. Four questions come to mind: 1. Which attributes or product characteristics do potential customers react favourably to? 2. How are competitive branded products perceived with regard to these attributes? 3. What niche could the new product occupy, considering the expectations of the target segment and the positions held by competition? 4. What is the most effective operational marketing programme that will achieve the desired positioning? The answers to these questions presuppose the existence of a fine-tuned market segmenta-tion analysis, which is able to quantify the size of the potential market. Designing a green product concept Sensitivity towards the environment is today a must for business success and the account-able firm should assess the environmental implication of a new product not only at the con-cept development phase, but also at each phase of the PLC “from cradle to grave” . Numerous opportunities exist for refining existing products or developing new ones that meet envi-ronmental imperatives and satisfy customers’ expectations. These opportunities must be considered in a proactive way very early in development process.

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